So my brother owns a 4 unit complex in a pretty rough area and it was a major rehab but he picked it up for around $30K. Not sure how much he's put into it but he has finished 2 of the 4 units and both have rented fairly well for him from what he's said. I think he has only had one eviction in the last year and a half which seems good given the area. My word of caution though to anyone who is investing from out of state, I would not invest in SFR or MFRs in Memphis unless 1. you really know the area and are patient with tenants who often pay late, 2. you have someone that you completely trust living in Memphis to manage it and who has the ability to check on it if there are problems and go to court for you if needed, and 3. you know an electrician, plumber, and a handyman who are all willing to do side jobs (aside from their normal company work) at cheap rates. Not that I'm an expert but I would say if you satisfy those 3 criteria then you should be successful.
To answer other questions, I personally like the Frayser area for investing but have also had success in Hickory Hill (my brother calls it Hickory Hood - lots of gangs). However, I know other investors who buy all over Memphis in other areas and seem to do well. Just don't waste your time on 2 bedrooms or anything with 1 bath; you never get long-term tenants from what I've found. 3 beds are ideal for most families because the homes are typically between 1,000 to 1,400 sqft. Also, with these homes you can get away with window air units. Anything larger than that usually requires central air (which r410 units are expensive) and they must be caged or they will likely be stolen if the house goes vacant.
For people who buy MFRs, I am looking to scale and that is definitely more difficult with SFRs. How do you go about financing these properties? I know 4 units or less is non-commercial and require's 20% down (unless you know of more creative financing methods). How difficult is it to qualify for commercial loans and what is the down payment? If you have a MFR, would you mind sharing a breakout of your net operating income? I'm curious what the the income/expenses look like on these types of properties.
